http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/ Luxist Comments for Are More Wealthy People Giving Up The U.S. Passport To Avoid Taxes? http://www.luxist.com/media/feedlogo.gif http://www.luxist.com en-us Copyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
This really reinforces the conservative taxation rhetoric regarding increasing taxes on the wealthy. Expatriation was always a common theme in my economic classes at Berkeley, yet regarded as right wing agenda in the Political Science dept.

Increasing the taxes on the rich only forces them to relocate, essentially accomplishing the opposite of intended increased tax gains. They are not wealthy because they are foolish with their money; they are wealthy because they know how to keep it.
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I used to be so proud to be an American. That was before we became a socialist country and becoming more and more of one, by the month. So sad. Very sad.]]>Aug 18th 2009 1:06PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/Aug 21st 2009 12:07AMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
That's just stupid beyond belief. First of all, the only place rich people would want to live that has lower tax rates than the U.S. is Switzerland, and that's only because they went all out to attract the rich. There's almost no way they'll be able to maintain that level and still be, you know, the kind of place that rich people want to go. Second of all, there is no way . . . no way whatsoever . . . that they're going to be hurt by a return to 1990s tax rates. Oooohhh!!! A 4% top marginal rate increase!!! I'll go Galt, I swear I will, Binky, and this time I really mean it.

And so 90 of them went in the first half of the year? How does this compare to last year? Are there any French, German, Saudi, or Canadian rich folk who took their place? And what's this about being able to come back without paying taxes? If they own a place in New York, they'll pay taxes on it. If they buy a yacht in San Diego, they'll pay taxes on it. If they own a U.S. company from which they derive their wealth, they'll pay taxes. And they'll be living somewhere, after all --- and unless it's Switzerland, they'll be paying more taxes there. Oh, and Switzerland doesn't just tax real estate on a yearly basis --- they tax total wealth. Year after year after year.

I don't know who's more pitiable, the ones who believe the fabrications of Jay Krause, Esq., or his clients who actually do go through with it. ]]>Aug 18th 2009 6:45PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
Each Golden Goose makes their own decision as to when "enough is enough". Whether the Farmer (aka: Government) or the other barnyard animals (aka: the 99.9% of the Voting Public who are not Golden Geese) think "its just one more golden egg", doesn't come into the equation. Also at some point the Farmer's statements that "the golden eggs are for the common good" or "this farmyard is the best place on earth to live" will no longer be effective in keeping the Golden Geese in place. As an advisor to Golden Geese who are eying the barn door in unprecedented numbers, I often question the long-term wisdom of the Farmer and the barnyard animals. Once the Golden Geese have flow away they contribute NO MORE GOLDEN EGGS in the future. ]]>Aug 18th 2009 7:04PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
First, you act as if the cutesy-titled "Golden Geese" get or got nothing from their affiliation with the U.S. in amassing their wealth. As if there was no SEC, no U.S. military, no National Guard, no local police forces and no judical system to protect their interests and maintain the stability required for their businesses; no stock exchanges and no educated workforce to accomplish their goals; and no government investment in basic research and/or infrastructure to exploit. You also act as if the Golden Girls --- sorry, Golden "Geese" -- will take all of these things with them when they go, and there will be no other people willing and able to take advantage of the same benefits once the 24 karat Honkers fly abroad.

Second, you act as if they are fleeing in greater numbers now than they were before --- which, as I stated before, is highly questionable. But since you are in such a unique position, I wonder if you've ever asked your clients "why now"? Why weren't these same folks fleeing in the 90s? Why weren't they fleeing in the late 80s? Why not in the 70s? 60s? 50s? Basically, I guess I'm asking why the rich now are so much wimpier now than they used to be. Don't they know the taxes the Kennedy's paid? Or the Rockefellers? Why are they so whiny?

Third, you conveniently forget that to the extent your numbers are credible, they are not indicative of how important these Golden Goslings are to the economy or the U.S., but rather how incredibly much more money they have been allowed to amass than other folks, especially considering a tax structure designed by their friends and cronies.

Fourth -- thanks for the nice "barnyard animals" reference. You're classy.

Fifth, please explain why we should grant your rantings any more credence than those of the fellow quoted in the article, given that your website brags about relocating rich people? "Helping international clients sort through the relative advantages of relocating to non-traditional tax havens such as Australia, New Zealand, Ireland, Canada and Switzerland." I mean, that's your job, right? You help rich people dodge taxes, right? And what do you do when you "Consult[] on and propos[e] changes in economic citizenship legislation with the elected officials of several Caribbean nations"? Does that mean that you lobby elected officials to change their country's tax structure for the benefit of your clients who aren't even citizens? Elected officials who don't earn much money, live in a poor but beautiful country, and might be accustomed to a lesser degree of oversight with regard to the conduct of their business than officials in the U.S. -- sorry, in deference to your location, I should say "officials in the U.S. and Canada"? Because that's what it sounds like from where I sit, so I just wanted to ask.

If your entire professional existence is predicated on stoking these kinds of ridiculous perceptions, what credibility do you really have? ]]>Aug 20th 2009 3:05PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
This country was founded because of rich oppressors and those who inherited their wealth not allowing others the opportunity to create. You know who you are: The people who shop all day and don’t have a job. The ones who say they work for (their family) foundations, but only devote 160 hours all year to it, and the rest of the time they are in St. Tropez. Those who buy $40,000 dresses to attend the West Palm Beach Red Cross ball and proclaim they make the world better in doing so, but give nothing other than paying the ticket price. The ball goers should show up in a $100 dress or less and given the red cross $39,900. Those who spend their days painting and collecting maps, because for some ungodly reason cannot think of any other way to advance humanity. You are the true oppressors. You are vampires. You are the ones that civilization should be afraid of. Sucking the life blood of America and destroying the dream that anyone can succeed, because you think you are the chosen people this self affirmation, and only choose those who are already part of your circle to acknowledge. The true Americans are those who work. The garbage collectors, janitors, truckers, taxi drivers, payroll clerks, teachers, etc. are the Americans that should garner accolades. So remember taxes are far from excessive when people can afford to purchase a Maltese Falcon yacht, have 100 pair of Jimmy Choo shoes, and pay for $500k cars.

@ C.S. there is always someone ready willing and able to replace you period Heck there are ~2.5 million college graduates EVERY YEAR I'm sure some of them would love to be the next golden goose.]]>Aug 18th 2009 7:28PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
In the meantime, can you please solve a mystery that has been raised by one of your comments. Exactly how does the fact that someone else is a Golden Goose (whether inherited or earned) stop you or a college grad or anyone else from also becoming a Golden Goose?]]>Aug 19th 2009 9:50AMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/A friend who is brilliant, hard working, and wants to have the lifestyle that I grew up with, and maybe provide this to his future kids but cannot get it going. Why isn’t he upwardly mobile? He was born into poverty, and has to help support his mom. This is what should be celebrated and nurtured. By the way he had to drop out of the United States Military Academy because his mother had cancer and needed to work to help pay for the treatments.
How do people stop others from being a golden goose? 1. They are not born. 2. Business compete vociferously to maintain their market share. Other reasons include the fact that 27.3 percent of hires have been referred, and if you don’t know anyone in investment banking, that great law firm, etc. it’s going to be harder to get that job. I’m more inclined to hire a person that I grew up with or their friend’s friend… as a matter of fact. So, I went in to speak to someone today about purchasing a product that I would like to bring to market. This person told me that he has built relationships with his provider; he was one of the first to use the product before it became the most popular product and therefore it gave him cache, told me that I had no credibility. He also told me some other stuff, but at the end of the day he was un willing to even look at it unless I had certain letters at the beginning of my name even though the product has been around for 300 year, and is being sold elsewhere for much cheaper. That my friend is an example of how people get shut out and not allowed to be golden goose. Another example is the start of Amazon. Bezos got $300,000 from his father. There is no way that business could have been started by someone who was making $30,000 a year. Blah blah blah

At the end of the day get a job work at something the majority of time. Help advance society in a positive way. Do not sit on your butt because you have money. That is my message to everyone.
]]>Aug 19th 2009 1:23PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/Being a little more serious... this is just history repeating itself. This happened before, it was a tax on RV's or something.. it was some form of heavy taxation on the wealthy. And the only people it ended up hurting were the middle class/lower class.

That's the thing about the Federal Government, you have a bunch of people who never look back on the policy's and laws they have done in the past to see if they actually worked or not.

If it were a business it would have failed by now. Enough said. ]]>Aug 19th 2009 10:32PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
While it seems that Riddler has experienced personal examples of negative inclinations, I would submit that there are far more numerous examples of those with means using them in a positive manner.

To suggest that there is no room for new Golden Geese is rather ridiculous. It is a fact that in America personal fortunes (which are also the greatest) rarely last more then two generations; due to inhibiters like death and inheritance tax. Further more you have neglected to consider the numerous counter points to your argument like the existence of innovation

I don’t believe anyone would argue that a child born into greater means has equal opportunity those born with less, but early circumstances are little indication of the future. There exist many people who come from nothing yet accomplish everything. ]]>Aug 20th 2009 12:20AMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
This is the kind of thing which begs for a citation. Personally, I would doubt both parts of the equation: that fortunes rarely last more than two generations, and that those which do fail should be ascribed to "death and inheritance tax." Especially since most smart rich people have availed themselves of the services of someone such as the lawyer so credulously quoted in the article referenced, and have set up a series of trusts which protect the vast bulk of the fortune. ]]>Aug 20th 2009 3:05PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
The great news is that it is not impossible. My friend is moving on up, but our struggle is harder than my cousins (she will get an inheritance and my parents will give me nothing), and his is harder than mine.

Realize that complaining of taxes when your kids have some of life's finer luxuries when there are people out there like my friend who have to give up their chance to be like my parents, because they were born in in a different situation. This complaining can be called nothing else but whining. Take your whining else where is all I'm saying.

@C.S. I agree with you whole heatedly with your death and inheritance tax.

You lose the money because the supposedly rational you aren't rational, and do not know how to spend your money the best way. There's a revelation! This applies to government as well.]]>Aug 20th 2009 7:50PMhttp://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/http://www.luxist.com/2009/08/18/are-more-wealthy-people-giving-up-the-u-s-passport-to-avoid-tax/
Point One: "First, you act as if the cutesy-titled "Golden Geese" get or got nothing from their affiliation with the U.S. in amassing their wealth. As if there was no SEC, no U.S. military, no National Guard, no local police forces and no judical system to protect their interests and maintain the stability required for their businesses; no stock exchanges and no educated workforce to accomplish their goals; and no government investment in basic research and/or infrastructure to exploit."

Point One Response: You forget that up to the point of leaving the Golden Geese have been paying taxes. In fact they account for huge percentages of the total tax take. Here is a summary but you can look at the original IRS data links http://www.taxfoundation.org/news/show/250.html. So if you are trying to make the moral argument that they haven't paid for the "infrastructure for wealth", the actual numbers (based on IRS data) don't support that. Whether you like it or agree with it or not, some Golden Geese are deciding that they have already paid many times over their "fair share" for this "infrastructure for wealth" and don't feel any guilt over not continuing to pay even more for this benefit.

The Golden Geese will obviously take into account the future value they place on all of these things you mention, in maintaining and growing your wealth in their decision whether to leave or not. In addition, they will also take into account their ability to find these things in other places. Your hope is that they don't think they can possibly thrive in another other environment than the U.S. I think they can. What you or I believe is irrelevant, it is what the Golden Geese believe as they are making the decision whether to leave or not.

Point 2: "You also act as if the Golden Girls --- sorry, Golden "Geese" -- will take all of these things with them when they go, and there will be no other people willing and able to take advantage of the same benefits once the 24 karat Honkers fly abroad."

Point 2 Response: Again, I believe that whether the Golden Geese remain in the U.S. or not in no way hinders others from becoming Golden Geese. My point is that if a single current U.S. Golden Goose leaves the U.S., the one obvious undeniable fact is that this individual will no longer be contributing to the total U.S. tax revenue in the future. (You also seem to think that their capital, entrepreneural skills etc. have no economic value). Looking only at tax revenue for a moment, given the stats cited and the basic fact that the top 1% of U.S. taxpayers contributed 40% of the total U.S. tax revenue, if even a small number of these Golden Geese leave that will have an enormously assymetric impact on the total tax revenue collected. You seem to think that if they leave that another long suppressed Golden Goose will suddenly be free to blossom and will replace the tax revenue lost from the departed Golden Goose. For the sake of the U.S. government fiscal needs, I hope you are right. Unfortunately, because I don't believe in the concept of the suppressed potential Golden Goose (or the Tooth Fairy), I suspect you may be disappointed.

Point 3: "Second, you act as if they are fleeing in greater numbers now than they were before --- which, as I stated before, is highly questionable. But since you are in such a unique position, I wonder if you've ever asked your clients "why now"? Why weren't these same folks fleeing in the 90s? Why weren't they fleeing in the late 80s? Why not in the 70s? 60s? 50s? Basically, I guess I'm asking why the rich now are so much wimpier now than they used to be. Don't they know the taxes the Kennedy's paid? Or the Rockefellers? Why are they so whiny?"

Point 3 Response: Since 2004, the numbers of individuals who give up their U.S. citizenship are actually published in the Federal Register. (I know it is available on-line, maybe one of our better searchers can find the link and post it). It is worth understanding that from the time a U.S. Golden Goose severs their U.S. tax liability by renouncing at a consulate or embassy, until the Certificate of Loss of Nationality is issued, the information gathered from the State Department and the delay until the next quarterly Federal Register publication there is approximately a 9 to 12 month lag time before the public announcement of the departure of that Golden Goose. Since it does take some time to get the elements in place to expatriate (i.e. another citizenship, tax structuring etc.), you could not possibly see the official statistical reporting of this uptick in expatriation until 2010 at the earliest. Up to that point you are stuck with deciding whether you chose to believe the anedotal reports of the likes of Mr. Krause or myself.

Since doing my first expatriation in 1991, I has actually been in my own interest to understand the "drivers". The conclusions that I have reached is that because of the "flattening effects" that Thomas Friedman described in "The World is Flat", the ABILITY of Golden Geese to not only reproduce their lifestyle but also to maintain and growth their wealth post-expatriation has greatly increased.

What has happened since the current financial crisis began is that the Golden Geese have concluded that the U.S. government (and other governments as well) have greatly increased their fiscal requirements to pay for bailouts, stimulus packages etc. Since the Golden Geese are clearly the only potential source for tax revenues, they believe that they will be the ones asked to pay for all this. Their fears are confirmed each day by the President and Congress (and their counterparts in other countries). They are also seeing the expiration of the 2001 US estate tax reforms at the end of next year. The Golden Geese pay 100% of the estate tax and any hope that the previous reform will be extended has died. In addition, as the IRS stats indicate, the Golden Geese are contributing the highest percentage of the total tax revenue in U.S. history and the current proposals will ask them to contribute even more.

Another significant factor that my clients cite is a desire to engage in strategic philanthropy. The major factors here are: a)The Gates Foundation's demonstrated effectiveness in solving social problems (both in the U.S. and globally) has made them understand that they can have a real and demonstrable positive personal impact on the world; b) the increasingly common recognition by many individuals that their happiness and sense of fulfillment in life is better increased through philanthropy rather than increased consumer consumption (possibly driven by the ethos of the aging Baby Boomer population); and c) the widespread acknowledgement that government's are not terribly effective or efficient charitable vehicles. Every dollar legally saved in tax is another dollar that is available for that Golden Goose to use effectively in strategic philanthropy.

As a result of these factors and the fact that many have seen a noticeable large drop in their wealth large numbers of Golden Geese have taken stock of the situation and have come to the realization or conclusion that they do not remain in the U.S. in order to reproduce (or heaven forbid even improve) their personal lives; engage in strategic philanthropy; or to maintain and growth their wealth. In fact if they eliminate the U.S. tax burden (and with proper advice and planning do not replace it with another country's tax burden) they can either a) have higher income and wealth growth (since gross income will equal net income in a tax-free situation) or b) slide down the risk return curve and enjoy the same returns they were happy with before but from substantially less risky investments.

Point 4: "Third, you conveniently forget that to the extent your numbers are credible, they are not indicative of how important these Golden Goslings are to the economy or the U.S., but rather how incredibly much more money they have been allowed to amass than other folks, especially considering a tax structure designed by their friends and cronies."

Point 4 Response: I invite all readers of this thread to look at the Forbes List of the wealthy people in the U.S. and decide in each case whether that individual has no other positive impact on the U.S. economy aside from contributing tax dollars. Even if we agreed to CS's argument (which I think is ludicrous) that they don't, the lost tax revenue alone would be devasting.

Point 5: "Fourth -- thanks for the nice "barnyard animals" reference. You're classy."

Point 5 Response: It is an easily understandable frame of reference vehicle, not a moral judgement. In fact I often refer to myself with pride as a "plowhorse". If you truly took offence at this, may I often the suggestion that you may want to grow a bit thicker skin.

Point 6: "Fifth, please explain why we should grant your rantings any more credence than those of the fellow quoted in the article, given that your website brags about relocating rich people?"

Point 6 Response: As stated above, I concede that "official confirmation" cannot be provided until 2010. The readers can either decide on whether what I outline above rings true and put themselves mentally in the shoes of a Golden Goose and conclude whether considering expatriation is a logical response OR they can decide that individuals like Mr. Krause and myself have all independently decided to report a fantasy that somehow improves our own income. IOW, believe the message or shoot the messengers because you don't like the message they are reporting.

Point 7: "You help rich people dodge taxes, right?"

I help clients who chose to retain me to LEGALLY organize their affairs to minimize their future global tax burden. I see no moral difference in what I do than what an advisor who suggests an IRA to you or a car salesman who suggests that you participate in the "Cash for Clunkers" program.

Point 8: "And what do you do when you "Consult on and proposed changes in economic citizenship legislation with the elected officials of several Caribbean nations"? Does that mean that you lobby elected officials to change their country's tax structure for the benefit of your clients who aren't even citizens?

Point 8 Rebutal: It means that when asked by various governments I have made submissions on how they can improve their LEGAL residence and citizenship programs to make it more attractive for Golden Geese. Unlike yourself these democratically elected governments have reached the conclusion that the attraction of these Golden Geese does have a positive economic impact on their country.

Point 9: "Elected officials who don't earn much money, live in a poor but beautiful country, and might be accustomed to a lesser degree of oversight with regard to the conduct of their business than officials in the U.S. -- sorry, in deference to your location, I should say "officials in the U.S. and Canada"? Because that's what it sounds like from where I sit, so I just wanted to ask. "

Point 9 Rebutal: You are lurching dangerously close to a debate faux pas called an Ad Hominem attack (http://en.wikipedia.org/wiki/Ad_hominem) which undermines your credibility. In addition, I will let pass the inherent slight against the intelligence and sophistication of non-U.S. elected officials and note that I have made written submissions and appeared in front of what you feel are "real" officials and government committees in countries such as Canada and the U.K.

Point 10: " 'It is a fact that in America personal fortunes (which are also the greatest) rarely last more then two generations; due to inhibiters like death and inheritance tax.' This is the kind of thing which begs for a citation."

I believe that the poster was referring to the well know "Shirtsleeves to Shirtsleeves in 3 generations" concept. There is a wealth of academic articles supporting that. However I will add that a major contributing factor to this phenomena is that the following generations are often not trained in how to maintain and grow wealth.

CS the floor is yours.
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